Q1 PAT ₹8.68 Cr up 16% YoY; ₹370 Cr Friction sale parks 81% of business as discontinued
PAT +16.35% YoY · revenue +21.25% · margins compressing
₹105.58 Cr
+21.25% YoY
₹8.68 Cr
+16.35% YoY
8.21%
-0.4pp YoY
₹5.88
Hindustan Composites reported Q1 FY27 total consolidated revenue of ₹105.58 Cr (+21.3% YoY, flat QoQ) and PAT of ₹8.68 Cr (+16.4% YoY, but −25.8% QoQ off a strong ₹11.70 Cr March quarter), with EPS at ₹5.88 vs ₹5.05 a year ago. Net margin eased to 8.2% from 8.6% YoY and 11.1% QoQ — a mild YoY squeeze that sits on the trading and unallocable-expense lines rather than any one-off, as no exceptional gain was booked this quarter.
Q1 FY-2027 vs prior quarters
The print, however, is overshadowed by structure: on June 30, 2026 the board approved selling the entire Friction Business Undertaking (auto/rail/industrial friction materials) to Rane (Madras) for ₹370 Cr on a slump-sale basis, subject to shareholder approval at the Sept 29 AGM. That unit has accordingly been reclassified as discontinued operations, and it is effectively the whole company: it generated ₹85.53 Cr of revenue (~81%) and ₹6.75 Cr of PAT (~78%) this quarter. Strip it out and the continuing business — an Investment segment (₹9.81 Cr) plus Commodity Trading (₹10.24 Cr) — earned just ₹1.93 Cr PAT on ₹20.05 Cr revenue. The company is, in substance, converting into an investment-holding-plus-trading entity with a ₹370 Cr cash inflow pending.
The stock went into the print at ₹446.6, up 5.1% over the past month of trading.
For context: PAT has now risen for 2 consecutive quarters; revenue is at a 6-quarter high.
Standalone and consolidated are near-identical (the 49% JV, Compo Advics, contributes nothing as its accumulated losses exceed the carrying value under Ind AS 28), so basis makes no difference to the story. There is no analyst consensus or management guidance on record for a company of this size, and the filing carries no press-release framing; auditor Lodha & Co issued an unmodified limited-review conclusion with an emphasis-of-matter on the pending Friction sale. The number that matters next is not the YoY growth but how the ₹370 Cr is redeployed, since the earnings engine is being sold.
W1
Closure of the ₹370 Cr Friction slump sale — shareholder vote at the Sep 29, 2026 AGM; the disposal gain is not yet booked and will hit a future quarter
W2
Redeployment of ₹370 Cr proceeds — continuing ops delivered only ₹1.93 Cr PAT this quarter vs ₹8.68 Cr total, so the post-sale earnings base is thin
W3
Margin path of the remaining Investment + Commodity Trading segments (NPM slipped to 8.2%; Commodity Trading is near-zero-margin at ₹0.39 Cr result on ₹10.24 Cr revenue)
In Lakhs; converted to Cr. Friction business classified as DISCONTINUED ops pending Rs370 Cr slump sale to Rane (Madras) - contributes Rs85.53 Cr rev + Rs6.75 Cr PAT of the totals. Figures shown are TOTAL (continuing Rs20.05 Cr rev/Rs1.93 Cr PAT + discontinued), matching our historical basis. No sale gain booked yet (deal not closed). Standalone = consolidated (JV Compo Advics losses unrecognised, Ind AS 28). Continuing-ops tax is a net credit (deferred -79L). Unaudited, limited review, emphasis-of-matter on the slump sale.